Pennsylvania Governor Seeks Revenue Boost from Energy Leases on State Land

By Jillian Kay Melchior —
February 6, 2014

Many states are showing a surplus, but Pennsylvania is facing a deficit of more than a billion dollars.

Though some one-time federal funds will help balance this year’s budget, Governor Tom Corbett has also proposed to allow gas leases on state lands. It’s a good way to raise revenue without hiking taxes, and it also allows the state government to take advantage of Pennsylvania’s energy boom.

Between 2011 and 2012 alone, Pennsylvania’s natural-gas production increased by 72 percent, according to the Energy Information Administration. Though the numbers are still being crunched, the EIA has suggested Pennsylvania may have already overtaken competitors, with only Texas surpassing it in natural-gas production.

By leasing more state land for energy extraction, Pennsylvania could immediately raise $75 million in new revenue, by Corbett’s calculations. The leases would allow energy companies to access the underground minerals without marring the land on the surface of the state property.

As good an idea as this is, it should be coupled with some spending restraint. Democrat Ed Rendell, who was governor before Corbett, saved only $40 million of the $475.3 million collected in tax revenue during the early days of Pennsylvania’s energy boom, the Pittsburgh Tribune-Review notes. Corbett has similarly spent a considerable portion of the revenues generated from the existing state-owned leases.

Broadening energy access is a good plan, but unless some of the proceeds are conserved, Pennsylvania squanders a chance for a more secure financial future.

— Jillian Kay Melchior is a Thomas L. Rhodes Fellow for the Franklin Center for Government and Public Integrity. She also writes about energy and environmental policy as a senior fellow for the Independent Women’s Forum.